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News & Press: Labour Relations

Department of Labour nabs a cheating employer on the National Minimum Wage exemption system

Monday, 04 February 2019   (0 Comments)
Posted by: Tasveera Singh
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The Department of Labour wants to open a fraud case with the South African Police Services (SAPS) against an employer that misrepresented itself in order to obtain an exemption from paying the National Minimum Wage (NMW). The Department wishes to inform the public that it is in the process of imposing punitive measures and initiating a process of withdrawing the granted exemption as per section 5 of the Act.

Under section 15 of the Act, makes provision for an employer to apply for an exemption that cannot afford to pay the NMW. Mildred Oliphant, the Labour Minister published regulations relating to the manner in which the exemption must be granted. These applications are submitted via the NMW online system.
Background:
An employee sent an email to the Director General’s office to confirm the authenticity of the exemption notice displayed at their workplace. The notice depicted a rate of R16.00 per hour effective from 17 January 2019. Upon an investigation, the Department found that the employer did apply for an exemption from paying the legislated R 20.00 per hour due to insufficient profitability. The Department granted a rate of R 18.00 per hour and not R 16.00 per hour as displayed by the employer.

Section 5 of the Act states that an exemption notice may be withdrawn if:

• The employer has presented false or incorrect information that has led to the granting in its of application for an exemption
• The employer is not compliant with the exemption notice
• The employer’s financial situation has improved to the extent that the employer is able to pay the NMW
• There are other justifiable grounds for withdrawing the exemption notice
The Department of Labour is committed to naming and shaming employers that are engaging in fraudulent activities.

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